Spending Scholar Dollars Well

There are three arguments for financial support to post-secondary education, which reflect different perspectives. Academics point out that universities create and disseminate knowledge, and add to the social, cultural, and intellectual fabric of their communities. Students argue that post-secondary education is needed to succeed and should be accessible to all. There is some truth in both of these viewpoints. But when universities themselves advocate for funding, the primary argument is that it will help our young people acquire the skills needed for the knowledge economy here in Nova Scotia.

But government policy is not well aligned with this goal. In fact, a central planning model often does more harm than good.

Consider the case of teachers. For years we have been graduating far more teachers than the system can absorb. According to a December 2007 report, an average of 700 teachers per year either leave the province or the profession. At that time, we had four of our universities graduating almost 400 new teachers per year, in addition to which more than 600 others were being certified after graduating elsewhere. Why is a province with a surplus of teachers certifying 1,000 new ones each year ? (see Appendix A) Notwithstanding the recommendations in the report the Minister chose to allow a fifth university to offer a program.

A student who consults the websites of those five Universities (Acadia, MSVU, St.FX, U Ste-Anne, CBU) will find lots of information about the programs but nothing about the dismal job prospects in Nova Scotia for graduates. This is understandable since Universities get paid for their number of students and they have had no difficulty meeting their enrolment quotas. In fact, when those quotas are filled hundreds of young Nova Scotians choose to attend out-of-province universities (most notably the University of Maine) for which they can receive student loans on the same basis as if they were studying in Nova Scotia. And what are their prospects?

From the 2007 report:

“Selection procedures for admission into the education programs at the University of Maine appear to be less stringent than those at Nova Scotian universities with approved programs. The Review Panel was informed that the University of Maine targets those students from Nova Scotia who were not able to access Nova Scotian programs for whatever reason. In fact, one Nova Scotian university reported being contacted on at least two occasions by one of the Maine campuses, asking for a list of candidates who applied to that university but were not accepted.”

The prospects for these students to get teaching jobs in Nova Scotia, and thereby repay their loans, are very poor. In fact, except for those with particular undergraduate skills (eg. math, physics, French language capability), the known enrolment declines of future years will create considerable obstacles for all graduates.

The 2007 report worries about its inability to control out-of-province supply but does not question whether this is the right strategy. One would expect that in such a highly competitive environment there would be opportunity to maximize quality but this does not appear to have been considered. It is worth noting that in Finland, Singapore, and South Korea – which have enviable levels of achievement in secondary education – only the top third of undergraduates are eligible for teacher training.

Meanwhile in areas with greater promise for jobs – financial services, information and communications technologies, some of the health professions – available spaces often go unfilled. Jobs in financial services increased from 12,600 to 15,900 in the two years ending February 2011. The comparable increases in information and communication technologies were from 17,700 to 19,200; and in health professions from 59,900 to 65,300.

In the previous postings on post-secondary education, it has been argued that the funding to support tuition should be provided as vouchers for students rather than as direct funding to universities. If adopted, this policy provides a tool to influence behavior without resorting to ineffective supply management measures.

Here are some possibilities:

1. In order to get vouchers, students would be required to review the available data on job prospects in their chosen field. These predictions will always be imperfect but students should still have the best available information. The existing data on loan repayment rates (see Appendix B) are useful indicators of program value. They should be better publicized and results subdivided by University faculty. If a student enrolls in a program that leads to unemployment and loan default both (s)he and the taxpayer are losers.
2. Some portion of the vouchers should be interest free loans. The loans would be forgiven if the graduate stayed in Nova Scotia as a taxpayer but would be repayable if the graduate moved out of province after graduation. The proceeds from these repayments could be used to enhance needs-based student assistance. Another approach to the same idea would be to provide bigger vouchers for programs that appeared to have better job prospects.
3. Neither vouchers nor student loans nor practicum placements nor teacher certificates would be available to education students unless they finished in the top third of their undergraduate programs. The quality of new teachers would improve and the number of unemployed teachers reduce. Use the money saved to enhance vouchers in the programs with more promising job prospects in Nova Scotia.
4. At present the bargaining agreement with the NSTU awards positions on the basis of seniority. Perhaps that is why many math teachers lack appropriate undergraduate credentials while those who have them are teaching other subjects. It is in the interest of pupils that the best possible teachers be chosen for every job. Allow graduating teachers to compete for jobs on the basis of ability rather than seniority.

This paper has focused primarily on teachers because the present arrangements are so obviously defective. But the same principles should apply across all faculties at all universities.

The measures proposed would eliminate the need for the failing efforts at supply management. Universities should not be limited in the number of places they offer for any program. But the signals provided by the distribution of vouchers and availability of loans would help students make better choices. And the students who do graduate would have better prospects for employment.

The purpose is not to cut spending but rather to focus spending more tightly on the goal of helping our young people find successful career paths at home.

Appendix A – Nova Scotia Teacher Certifications Issued (By location of educational institution)

Appendix B – 2008 Canada Student Loan Repayment Rates (Nova Scotia)